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February Top Undervalued Stock

Undervalued companies are those that trade at a price lower than their actual values, such as John Laing Group and Goldplat. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.

John Laing Group plc, an investment holding company, originates, invests in, and manages greenfield infrastructure projects. Formed in 1848, and currently headed by CEO Olivier Brousse, the company now has 160 employees and with the market cap of GBP £1.02B, it falls under the small-cap group.

JLG’s shares are currently floating at around -12% below its actual level of £3.05, at a price tag of £2.7, based on my discounted cash flow model. This discrepancy gives us a chance to invest in JLG at a discount. In addition to this, JLG’s PE ratio is around 8.2x compared to its construction peer level of 14.1x, indicating that relative to its comparable company group, JLG’s shares can be purchased for a lower price. JLG is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 6% has been dropping for the past few years indicating JLG’s ability to pay down its debt. More detail on John Laing Group here.

Goldplat PLC engages in gold and other precious metals recovery operations in South Africa and Ghana. Established in 2005, and now run by Gerard Kisbey-Green, the company employs 545 people and with the company’s market cap sitting at GBP £12.14M, it falls under the small-cap stocks category.

GDP’s stock is currently trading at -63% lower than its actual value of £0.2, at the market price of £0.07, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. In terms of relative valuation, GDP’s PE ratio stands at 9x against its its metals and mining peer level of 14x, suggesting that relative to its competitors, GDP’s stock can be bought at a cheaper price. GDP is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities.

International Consolidated Airlines Group, S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, Ireland, the United States, and rest of the world. Founded in 2010, and currently run by William Walsh, the company size now stands at 63,240 people and with the market cap of GBP £12.89B, it falls under the large-cap stocks category.

IAG’s stock is currently hovering at around -54% under its real value of €13.51, at the market price of €6.26, based on my discounted cash flow model. This discrepancy gives us a chance to invest in IAG at a discount. Furthermore, IAG’s PE ratio is around 7.7x against its its airlines peer level of 8.6x, suggesting that relative to its competitors, we can buy IAG’s stock at a cheaper price today. IAG is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.

For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our interactive list of undervalued stocks. To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.